The AELB said the approval was granted to the Australian miner, despite receiving 1,123 comments on Lynas’ documents during a public feedback period. However, it said the licence could be suspended or withdrawn and further applications will not be considered if conditions stipulated by the board were broken.

Activists hold placards during a demonstration against Australian miner Lynas in front of Malaysia's landmark Petronas Twin Towers in Kuala Lumpur last year. Pic: AP.

AELB also said it would monitor the plant over the next two years whereby Lynas must show that it would meet safe levels of radiation before it is granted a full operating licence.

Lynas, which is listed on the Australian Stock Exchange, jumped 22% after news of the approval broke this morning.

Among the conditions that Lynas must meet is to come up with a long-term waste management plan, such as a permanent disposal facility. Also in doubt is whether Lynas is able to reprocess low-level radioactive waste into harmless commercial products.

The board also said location for the permanent disposal facility must be tabled within 10 months and a deposit of US$50 million must be given by the company as a form of financial guarantee to the government.

Lynas’ rare earth mining plant is more than 90% completed and was supposed to begin operating last year, but its operations are delayed following protests by residents in Kuantan and non-governmental organization groups that claimed that Lynas’ operations would result in producing harmful radioactive waste. The company said it expects operations to begin in the second quarter this year.

Lynas has recently embarked on an ‘engagement’ campaign with members of the public by furbishing explanation of its operations via a website, and claim that the operations in Kuantan would not generate harmful radioactive waste but enrich the local economy.

The controversial rare earth mining plant has sparked outcry among the locals, as they are concerned Lynas’ operations would result in contamination that would take decades to clean up.

In their views after the feedback period ended on Jan 26, residents and anti-Lynas groups claimed that Lynas’ long-term waste management plan is incomplete and “full of holes”. The groups also said that the synthetic gypsum that Lynas would produce from its plant in Gebeng, Kuantan, would be an additional source of radiation to the locals.

The controversial plant is also seen as politically detrimental to Najib Razak’s administration, who is expected to call elections as early this coming March.

Najib, who is the current Prime Minister of Malaysia, has until March 2013 to call the general elections.